Amid price hikes: Minimum wage insufficient vs. rising family cost of living — IBON

The onslaught of price hikes since early this year has made the mandated minimum wage in the National Capital Region (NCR) even more inadequate for millions of Filipino workers to decently support their families, said research group IBON.

IBON computations show that the NCR nominal minimum wage still falls considerably short of the rising family living wage (FLW).

As of March 2018, Php1,168 is needed daily to support a family of six, while Php973 is needed for a family of five.

Worsening inflation has increased the FLW needed from the same period last year by Php57 for a family of six and by Php48 for a family of five–a 5.2 percent increase for both.

The minimum wage however has not kept up with the rising cost of living.

The NCR nominal minimum wage of Php512 is just 43.8 percent of the Php1,168 FLW in March this year.

This translates into a significant wage gap of Php656 or 56.2 percent, said the group.

For a family of five, the gap was nearly half (47.4 percent) of the FLW.

These wage gaps grew despite the regional wage board’s approval of a Php21 minimum wage increase from Php491 to Php512 last October 2017.

IBON said that the wage discrepancy is just as wide as the same period last year. In March 2017, the nominal minimum wage in the NCR of Php491 was 44.2 percent of the Php1,111 FLW for a family of six.

This was a wage gap of Php620 or 55.8 percent.

The group also noted that the average daily basic pay of wage and salary workers in NCR has declined under the Duterte administration. Latest official figures show that the NCR average daily basic pay fell from Php557.46 in July 2016 to Php542.16 in July 2017.

Workers’ minimum wages cannot cope with the higher prices that are driving up inflation and the cost of living, said the group.

The 5.2 percent inflation rate for the NCR in March 2018 is so far the highest in five years according to the Philippine Statistics Authority.

IBON said that there should be an immediate, substantial and across-the-board minimum wage increase against the high inflation.

The government should approve and mandate the Php750 national minimum wage that workers groups are calling for.

Implementation of TRAIN Package One which is among the drivers of inflation should also be suspended and the law reviewed towards being amended to become genuinely progressive.

It should also ensure job security, necessary benefits, better working conditions, as well as much-needed social services that will assist Filipino workers and their families in meeting their basic needs, said the group. #

 

What You Need to Know About Charter Change and its Possible Effects on the Education Sector

By Jose Lorenzo Lim

(In a series of articles, IBON tackles proposals to amend the 1987 Philippine Constitution*, focusing on social and economic provisions. These touch on agrarian reform for industrialization, and full foreign ownership and control of Philippine lands and natural resources including agricultural lands, public utilities, labor rights, educational institutions and mass media. This particular article features allowing full foreign ownership of educational institutions in the Philippines.)

Before you agree to amendments on the current 1987 Constitution of the Philippines for a Federal form of government, you might want to check out the current proposals for Charter change (Cha-cha) especially in the education sector.

Charter What?

Cha-cha or constitutional reform refers to amendments or revisions in the 1987 Philippine Constitution. The amendments may be on provisions on the term limit of a President, overhauling government structure, or even economic policies. Since the time of Martial Law, Cha-cha has been brought up by almost every administration but ultimately failed.

Now, there is a call to shift to a Federal type of government through different proposals. Thus, President Rodrigo Duterte set up 19-member consultative body to review the 1987 Constitution.

Three Documents to Remember

As of February, there were four proposals of Cha-cha in the Philippines stipulated in the following documents:

  • Resolution of Both Houses Number 8 (RBH 8) consolidated in House Concurrent Resolution Number 9 (HCR 9)
  • PDP-Laban Federalism Institute (FI) Proposed Constitution
  • House subcommittee version

Charter Change and Education Provisions

With all of these proposals happening, let’s take a look at the proposed changes across all four documents regarding the provisions on education.

Education has repeatedly been said to be a fundamental human right. This is written in the Universal Declaration of Human Rights that says education shall be directed to the full development of the human personality and to the strengthening of respect for human rights and fundamental freedoms.

Moreover, the 1987 Constitution stipulates that quality educational opportunities at all levels should be the right of all Filipino citizens. Throughout decades of neoliberal globalization, this principle has been replaced with a market-based logic that treats education as a commodity sold by businessmen for profit.

Looking back, since 1965, market-biased international financial institutions (IFIs) such as the World Bank, the United States Agency for International Development (USAID), and the Asian Development Bank (ADB) have played significant roles in commercializing Philippine education.

Now, the onset of Cha-cha threatens the education sector to the further gain of both local and foreign capitalists.

RBH 8 says that free education should be upheld in pre-school, primary, elementary, and in colleges and universities (see Table 1). The stipulation suggests that privately or foreign-owned educational institutions could receive government subsidy. The house subcommittee on the other hand grants each state the power to provide basic and secondary education without particularizing whether or not it should be free. Meanwhile, the PDP-Laban has no stance on whether to give free education to Filipino citizens.

Regarding foreign ownership rules in Article XII: National Economy and Patrimony, RBH 08 imposes the limitations on foreign ownership of corporations, public utilities, educational insitutions (a.k.a. “60-40 rule”), as well as of media and advertising entities, but inserts the phrase “unless otherwise provided by law” so that the stipulation could be overruled by new laws (see Table 2).

The PDP- Laban and House proposals removed the “60-40” rule and other provisions on foreign ownership.

The “unless otherwise provided by law“ clause in most of these provisions is an easy way for Congress to operationalize the foreign ownership of educational institutions and circumvent the Constitution without having to rewrite it. Take note that the Philippine Senate is already conducting hearings on the amendments to the Public Services Act, which would open public services to foreign ownership.

Foreign ownership of educational institutions can be a bad thing for the Philippines. It could worsen colonial backward education fostering uncritical and subservient thinking.

Foreign ownership could lead to the further commercialization of education especially with the introduction of new competitors to the private education business. Already, commercialized Philippine education has seen decades of increasing tuition and school fees, the rise of oligarchs-run educational institutions against a weakening public education system, and a career-oriented curriculum instead of one that instills the value of social service and nation building.

During the last school year, more than 250 private colleges and universities increased tuition and other school fees by an average of 7.0%. Private educational institutions are not covered by the newly enacted free tuition law. Government has been spending public funds for private gain: For instance, from 2010-2016, a total of Php47.9 billion was alloted for the Government Assistance for Students and Teachers in Private Education (GASTPE).

One might say that the introduction of foreign ownership will lead to better curriculums and better opportunities for Filipinos abroad. But the first batch of K to 12 graduates are going out to the world and while they are ‘equipped’ to be hired already, they would become a source of cheap labor. The K to 12 program was designed to produce overseas Filipino workers (OFWs) for cheap labor, which in the first place Filipinos would not have to be if there were enough jobs in the country.

What we need is a nationalistic curriculum that is designed to address the needs of the Philippines. Take for example the curriculum in Lumad schools, designed by the indigenous people to develop and sustain their farming communities.

What do we do now?

The 1987 Constitution stated that ownership and control of educational institutions should be limited to Filipino citizens. Yet, Philippine governments have allowed the neoliberal policies that have commercialized education and geared the curriculum towards market-oriented globalization. Cha-cha will remove any remaining protection of the sector and may even make it more vulnerable to being treated further as a commodity and serve foreign interests by opening it up to foreign ownership.

Like the policies and policy-makers who crafted it, the current education system of the Philippines does not reflect the genuine aspirations of the Filipino people for development. Now, more than ever, Filipinos need to push for a curriculum that promotes genuine love of country, the use of scientific methods than pseudoscientific ones, and the advancement of the rights of marginalized groups in Philippine society. Simply put, the country needs a nationalist, scientific, and mass-oriented education.

Slow TRAIN cash transfers highlight govt’s insensitivity–IBON

“The poor will get relief about three months into suffering TRAIN-induced price increases with millions of others only getting it much later.”

 Research group IBON said that the slow implementation of the Duterte administration’s social mitigation measures including its cash subsidies highlights how these are just an afterthought to cover up how the Tax Reform for Acceleration and Inclusion’s (TRAIN) program is anti-poor and pro-rich. TRAIN was railroaded last year to already be able to raise revenues starting January 2018 even if the supposed mitigation measures were not yet clear.

This is in reaction to the Department of Finance (DOF) announcement about the looming implementation of the government’s unconditional cash transfer (UCT) to supposedly help the 10 million poorest Filipino families cope with the impact of TRAIN. The DOF said that the 4.4 million existing Pantawid Pamilyang Pilipino Program (4Ps) beneficiaries and three (3) million indigent senior citizens will start receiving the Php200 per month cash subsidy in March. The balance of 2.6 million households are supposed to start receiving theirs in August.

IBON executive director Sonny Africa noted that the DOF was last year quick to undertake the staff work for raising taxes on the poor and giving income tax relief to the rich. Yet, in contrast, it was grossly unprepared to implement any of the supposed social mitigation measures even nearly two months into the law’s effectivity. As it is, the poor will get relief about three months into suffering TRAIN-induced price increases with millions of others only getting it much later in August or after eight months.

Africa also said that the DOF was merely scrambling to report 10 million helped “no matter how sloppy the figures.” “The numbers don’t even add up,” he said, “because many of the 3.3 million poor elderly will likely already be among the 4.4 million CCT beneficiary households so double-counting is already happening, more so two or more elderly are in these poor households.”

Meanwhile, TRAIN’s promised fuel subsidies for public utility vehicles (PUVs), fare discounts for the poor and other social mitigation measures still remain unrealized, said Africa.

Lastly, Africa said, it is worth repeating that the cash subsidies are temporary and only from 2018 to 2020. “These are also the three years when oil taxes keep rising and prices keep getting pushed up higher and higher,” Africa noted. “The real TRAIN shock happens in 2021 when the UCT gimmick is gone but the prices that the poor pay for their basic goods and services will be immensely higher,” he said. (IBON News / February 27, 2018)

Unsolicited projects for favored business interests to rise under Pres. Duterte?

By Arnold Padilla / IBON Features

When President Duterte said last month that “all projects of the Philippines would be something like a Swiss Challenge”, media attention has focused on the Swiss Challenge and its implications. But what the presidential statement implied was that in order to supposedly fast track his ambitious Build Build Build program, the administration may encourage more unsolicited proposals and negotiated contracts.

And there lies the real and bigger problem. Unsolicited proposals and negotiated contracts are the worst form of public procurement of infrastructure under the public-private partnership (PPP) scheme. These negotiated deals are the most prone to bureaucratic corruption and to patronage for favored business interests.

Close ties

San Miguel Corporation (SMC) president Ramon Ang, for instance, is among the closest to Malacañang. He is publicly known as one of the (unofficial) major campaign contributors of Pres. Duterte and patron of the Chief Executive’s controversial anti-drug campaign. SMC, a Php255-billion diversified conglomerate and known to cultivate close ties with whoever is in power, is currently implementing theunsolicited Php62.7-billion MRT-7 while awaiting government approval of two more unsolicited mega infrastructure projects.

Based on the revised (2012) Implementing Rules and Regulations (IRR) of the Build-Operate-Transfer (BOT) Law, unsolicited proposals are “project proposals submitted by the private sector, not in response to a formal solicitation or request issued by an Agency/LGU (local government unit) and not part of the list of priority projects as identified by Agency/LGU, to undertake Infrastructure or Development projects.”

A third party could challenge the offer of the original proponent of an unsolicited proposal through what is called the “Swiss Challenge”. In order to bag the contract, the original proponent should match the counter-offer of the third party. In practice, however, all unsolicitedprojects concluded in the Philippines since the 1990s were clinched by the original proponent except in the case of the controversial NAIA Terminal 3 where the challenger (Philippine International Terminals Co. Inc. or PIATCO) won but the contract was declared null and void by the Supreme Court (SC) due to irregularities.

At the start of its term, the Duterte administration’s economic managers already announced that the government is open to unsolicitedproposals aside from its so-called hybrid PPP – i.e. mobilizing official development assistance (ODA) to build infrastructure and later bidding out its operation and maintenance (O&M) to the private sector. Ang, however, called hybrid PPP as “complicated” and expressed preference for unsolicited proposals for supposedly faster delivery of projects.

Following the President’s pronouncement of openness to unsolicited projects, the latter flooded the government, with project proposalsreaching a total of as much as Php3 trillion in the first year of the Duterte administration according to a news report last year. But most of these are just concepts or ideas, with actual proposals under evaluation by the Investment Coordination Committee (ICC) reaching only three as of the latest (January 2018) projects status report from the PPP Center.

But these three unsolicited proposals are among the just five PPP projects that the PPP Center said could probably be rolled out this year. Two of these unsolicited proposals have SMC as the original proponent – the Php700-billion New Manila International Airport and the Php338.8-billion Manila Bay Integrated Flood Control, Coastal Defense and Expressway Project. The third one is the Php51.17-billion East-West Rail Project of Megawide Construction Corp.

A separate news report said that SMC has an unsolicited proposal to the state-run Philippine National Construction Corp. (PNCC) to expand the Metro Manila Skyway and the South Luzon Expressway (SLEX) for Php554 billion.

Combined, the indicative cost of SMC’s reported unsolicited proposals (Php1.59 trillion) already account for 53% of the cost of all unsolicitedproposals (Php3 trillion) reportedly being pitched to the Duterte administration. To get a better grasp of how huge these two projects are, note that the total amount of all (16) PPP projects that have been awarded since the Aquino administration is “just” Php323.06 billion.

Beyond transparency and corruption

Even PPP advocates while recognizing that the presence of unsolicited proposals is on the rise warn governments to use them with caution and within a strict regulatory framework. In a review of unsolicited projects worldwide, a study commissioned by the Public-Private Infrastructure Advisory Facility (PPIAF) of the World Bank noted that among the common concerns on unsolicited proposals are: (1) lack of transparency in selection and implementation of projects; (2) avoidance of competition; (3) avoidance of due diligence processes; (4) opportunities for corruption and political patronage; and (5) acceptance of poor quality projects (design and/or execution) that do not even meet minimum requirements of any sort, in the name of expediency. The World Bank reportedly prohibits the use of unsolicited proposalsin projects that they fund.

Beyond transparency and corruption issues, however, the greater impact of unsolicited proposals involve how such procurement method further weakens the mandate and capacity of the state to design and implement a rational infrastructure program that is responsive to the long-term needs of the people and the economy. Unsolicited proposals also represent how corporate interests that are mainly driven by profit motivation take over infrastructure development and operation, often at the expense of the country’s overall development and social agenda.

Ideally, infrastructure projects are determined by and consistent with the development plan of a country, meaning projects are initiated and prioritized (including in terms of resource allocation) by government based on such plan. Government’s role goes beyond identification, resource mobilization and construction, and extends to operation and maintenance of the infrastructure.

This has been the practice in many countries including the Philippines until the advent of neoliberalism in the 1980s and its rapid expansion in the 1990s. Government’s role has been reduced to listing down of infrastructure projects and soliciting private investors to build and operate them through bidding or direct negotiation. This is already problematic by itself as it essentially privatizes the infrastructure and distorts its economic and social purpose as commercial viability becomes the primary consideration.

Tailor-made public infra for private interests

Unsolicited proposals thus further detach infrastructure development from specific public needs and interests. With the private proponent initiating the process of identification and conceptualization, unsolicited projects are often not reflective of priority infrastructure needs. In addition, unsolicited proposals reinforce the undue concentration of infrastructure development in urban centers and more developed regions at the expense of poorer regions or areas that need more infrastructure, but where commercial prospects or interests are less for private sector proponents.

There are cases where big business proposes infrastructure projects that are not just meant to supply public needs (and directly profit from it) but are also tailor-made to bolster its other private commercial interests. One example is the unsolicited proposal jointly submitted by SM and Ayala groups to build a Php25-billion 8.6-kilometer elevated toll road that will supposedly help decongest traffic along EDSA. But the project will actually benefit the two conglomerates’ property development interests as the proposed toll road would also increase access to the SM Mall of Asia complex and Ayala’s Makati business district. SMC is questioning the SM-Ayala proposal because it will allegedly duplicate the existing SMC-operated NAIA Expressway and affect traffic volume (and profits).

But while SMC is questioning the need for the SM-Ayala’s unsolicited toll road, the wisdom of its own unsolicited New Manila International Airport is also questionable. Under its proposal, SMC will build a massive Php700-billion airport spanning thousands of hectares along Manila Bay in Bulakan, Bulacan with six parallel runways and an initial 100-million passenger capacity (thrice of NAIA’s). But it will also just duplicate the recently awarded Clark International Airport Expansion Project (a solicited PPP deal bagged by Megawide) whose further expansion has lower social (as a new infrastructure, the Bulacan airport could potentially displace more communities) and financial costs (e.g. there are three separate unsolicited proposals to develop Clark airport from JG Summit, Megawide, and Manny Pangilinan’s group with costs ranging from Php187 billion to Php337 billion).

For SMC, the agenda is not just to build and operate an airport that would be an alternative to the highly congested and inefficient NAIA. What SMC wants to build is an “aerotropolis” or a metropolis revolving around an airport. Aside from the 1,168-hectare airport, the plan includes a 2,500-hectare city complex which gives the giant conglomerate additional potential profits from property development as well as a toll road that will link with NLEX, on top of running the airport.

No guarantees

According to the BOT Law and its IRR, unsolicited projects are not entitled to direct government guarantee, subsidy or equity. Nonetheless, like solicited PPP projects, they are still eligible for other perks including investment incentives under the Omnibus Investment Code and performance undertaking (i.e., a government guarantee that it will assume responsibility for the performance of an agency’s obligations under the contractual arrangement including the payment of monetary obligations, in case of default) such as what SMC’s unsolicited MRT-7 project enjoys. They even enjoy “security assistance”, or the deployment of police or military forces in the vicinity of the project site to provide security during the implementation of the project up to completion.

The BOT Law requires as well that proposals be innovative and offer a new concept or technology. But it is unclear what is particularly innovative in an airport in Bulacan or an MRT along Commonwealth Avenue to pass as unsolicited projects. Indeed, a 2012 assessment ofunsolicited projects prepared for the PPP Center (with support from the Asian Development Bank or ADB) concluded that “most (unsolicited)proposals did not really offer new technology”.

What is clear is that there are no guarantees that the country’s chronic infrastructure crisis, which is being used to justify more unsolicitedproposals and negotiated deals, would be solved with more unsolicited projects. On the contrary, undue public burden could increase as numerous but disjointed or impractical networks of roads, airports, and other infrastructure are built through self-serving unsolicitedprojects by big business interest.

,

PH minerals benefit foreigners not Filipinos

By IBON.org

Majority of Philippine minerals are exported and mainly benefit foreign corporations, research group IBON said. While ensuring environmentally safe and responsible mining methods, the Duterte administration should also ban the exodus of the country’s raw minerals. These should instead be efficiently reserved for and utilized to support and develop the country’s key industries towards national industrialization, said the group. Read more